Tata Elxsi Q2 Results: Stock gains on hopes of revenue growth after two quarters of decline

Shares of Tata Elxsi Ltd. were trading nearly 2% higher on Thursday, October 9, ahead of their second-quarter earnings.

The company is estimated to report a 2.2% increase in revenue, on a sequential basis, from ₹892.1 crore to ₹912 crore in the September quarter.

Analysts expect its profit after tax to increase by 5.3% to ₹152 crore in the second quarter compared to ₹144.3 crore in the first quarter of this fiscal.

Its earnings before interest and taxes (EBIT) is expected to be at ₹170 crore compared to ₹162.4 crore in the previous quarter. Its EBIT margin is likely to expand to 18.65% from 18.2%, as per an average estimate of analysts.

Analysts are expecting a modest revenue growth. The first quarter of the financial year 2026, marked the fourth consecutive quarter of an earnings miss. The company's revenue has declined for two quarters in a row.

The company is hopeful of growth as deal ramp-ups in transportation and media and communications verticals are set to drive growth over the upcoming quarters, while the outlook on the healthcare and medical devices vertical remains challenging due to regulatory uncertainties.

The stock has declined over 18% this year, so far. At the current price, the stock trades at 42 times its financial year 2027 estimated price-to-earnings ratio.

In the previous quarter, Tata Elxsi reported a revenue decline of 3.9% sequentially and 9% from the previous year. It was led by the media and communications vertical declining by 5.5%, while healthcare and medical devices declining 6.7%. The transportation vertical remained flat.

23% of Tata Elxsi's revenue in financial year 2025 comes from Jaguar Land Rover, the luxury car manufacturing subsidiary of Tata Motors Ltd. It is among the more impacted set of auto original equipment manufacturers (OEMs) due to regulatory uncertainties, which would have a rub-off on existing programmes.

Shares of Tata Elxsi are trading 1.4% higher at ₹5,535.5. The stock trades significantly below its 52-week high of ₹8,027.

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